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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
January 23, 1997
AIRGAS, INC.
______________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-9344 56-0732648
_______________ _______________________ _____________
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification
incorporation) No.)
100 Matsonford Road, Suite 550
Radnor, PA 19087
_______________________________________
(Address of principal executive offices)
Registrant's telephone number, including area code: (610) 687-5253
_______________
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Item 5. Other Events.
____________
On January 23, 1997, Airgas, Inc. reported its earnings for the third quarter
ended December 31, 1996. The earnings report is described in the press
release attached as Exhibit 99 and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
__________________________________________________________________
(a) None
(b) None
(c) Exhibits.
99 Press Release dated January 23, 1997
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Signatures
__________
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AIRGAS, INC.
BY: /s/ Jeffrey P. Cornwell
_______________________
(Jeffrey P. Cornwell)
Vice President - Finance and
Corporate Controller
DATED: January 24, 1997
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For More Information:
Jeffrey P. Cornwell
James N. Borum
(610) 687-5253
AIRGAS, INC. REPORTS HIGHER THIRD QUARTER EARNINGS AND
RECORD CASH FLOW
RADNOR, Pennsylvania, January 23, 1997
Airgas, Inc. (NYSE-ARG) reported today an increase in net earnings of 12%
to $10,960,000 during the third quarter ended December 31, 1996 compared to
$9,817,000 in the same quarter last year. Earnings per share increased by 7%
to $.16 from $.15 for the same quarter last year. After tax cash flow (net
earnings plus depreciation, amortization and deferred income taxes) reached
record levels increasing 21% to $29,889,000 compared to $24,673,000 for the
same quarter last year. After tax cash flow per share increased by 16%
to $.43 from $.37 for the same quarter last year. Net sales increased 43% to
$297,203,000 during the quarter compared to the same quarter in the prior year
primarily due to the acquisition of 39 distribution businesses since October
1, 1995.
For the nine months ended December 31, 1996, net earnings increased
by 17% to $33,420,000 , and sales increased by 41% to $850,013,000. Net
earnings were $28,606,000 on sales of $601,851,000 for the prior year.
Earnings per share increased by 14% to $.49 from $.43 for the same period last
year. After tax cash flow increased by 22% to $86,386,000 compared to
$71,000,000 in the same period last year. After tax cash flow per share
increased by 19% to $1.27 from $1.08 in the same period last year.
Airgas' Chairman of the Board and Chief Executive Officer, Peter
McCausland, commented, "Positive earnings growth this quarter from an increase
in gross profits from same-store distribution sales was offset by dilution
from recent acquisitions, our 45% Joint Venture investment in National Welders
Supply and the start-up of Airgas Direct Industrial. Our Distribution hubs
made a positive contribution to our earnings growth, but that contribution was
tempered by the performance of certain hubs which have recently experienced
heavy acquisition activity and an unusually large number of start-up
branches."
Mr. McCausland added, "The quarter was impacted by the effects of a
sluggish industrial economy, compounded by the mid-week timing of the
Christmas and New Year's Day holidays and weather-related shutdowns.
Same-store distribution sales growth slowed to 1% during the month of December
as a result of significantly lower sales levels during the last two weeks of
the month."
In a separate matter, as announced on December 23, 1996, Airgas
was the victim of a fraudulent breach of contract by a third party supplier
related to purchases of refrigerant R-12. Immediately upon discovering the
fraud, the Company launched an intense effort to recover funds paid to the
supplier and/or product. Pending and potential lawsuits and insurance claims
preclude the Company from commenting further on the recovery efforts.
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Based on limited information currently available, the Company is
unable to quantify the probable amount of the loss or recovery which may be
associated with the fraud. The Company believes the maximum pre-tax loss,
including associated costs of the investigation and before considering any
recoveries, will not exceed $23 million. The Company believes there will be
recoveries of assets related to the fraud, including cash in bank accounts
frozen under restraining orders, net assets of the refrigerant supplier which
breached the contract and insurance proceeds under Airgas and the refrigerant
supplier's policies. The aggregate recovery amount is subject to change, even
in the near term, as additional assets are recovered, additional claims are
asserted or the market value of restrained assets fluctuates. The Company
will continue to vigorously pursue all possible sources of recovery. The
Company anticipates that it will record a charge to earnings during the fourth
quarter ending March 31, 1997, pending a full investigation of the facts and
information pertaining to the loss and potential remedies.
Mr. McCausland added that, "This incident was related to a
non-core product and does not have a material effect on the Company's
continuing business, financial strength, plans or growth prospects."
Pursuant to a stock purchase program previously authorized by
the Board of Directors, the Company purchased approximately 15,000 shares of
its Common Stock during the quarter. Purchases of the Company's common stock
will be used to fund acquisitions and employee benefit programs and are made
in open market transactions, from time-to-time, depending upon market
conditions.
Currently, the Airgas distributor network includes over 570 locations in
41 states, Mexico and Canada. Airgas is the largest distributor of
industrial, medical and specialty gases and related equipment in North
America. Airgas can be visited via the Internet at http://www.airgas.com.
This press release may contain statements that are forward-looking,
as that term is defined by the Private Securities Litigation Reform Act of
1995 or by the Securities and Exchange Commission in its rules, regulations
and releases. The Company intends that such forward-looking statements be
subject to the safe harbors created thereby. All forward-looking statements
are based on current expectations regarding important risk factors.
Accordingly, actual results may differ materially from those expressed in the
forward-looking statements, and the making of such statements should not be
regarded as a representation by the Company or any other person that the
results expressed therein will be achieved. Important risk factors include,
but are not limited, to the Company's ability to consolidate and integrate new
acquisitions, the Company's ability to recover assets in connection with the
fraudulent breach of contract related to refrigerant R-12 purchases and other
factors described in the Company's 1996 Form 10-K filed with the Securities
and Exchange Commission.
Consolidated statements of earnings follow on page 4.
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<TABLE>
<CAPTION>
AIRGAS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
December 31, December 31,
1996 1995 1996 1995
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Net sales:
Distribution $256,719 $199,066 $753,998 $575,156
Direct Industrial 29,556 - 66,445 -
Manufacturing 10,928 9,483 29,570 26,695
Total net sales 297,203 208,549 850,013 601,851
Costs and expenses:
Cost of products sold (excluding
depreciation and amortization)
Distribution 128,545 97,504 378,888 281,849
Direct Industrial 20,481 - 49,450 -
Manufacturing 7,267 6,343 19,444 17,372
Selling, distribution and
administrative expenses 94,991 69,812 270,722 201,946
Depreciation, depletion and
amortization 16,540 11,906 45,801 33,519
Total costs and expenses 267,824 185,565 764,305 534,686
Operating income:
Distribution 26,373 21,303 77,895 62,042
Direct Industrial 990 - 2,172 -
Manufacturing 2,016 1,681 5,641 5,123
Total operating income 29,379 22,984 85,708 67,165
Interest expense, net (10,385) (6,305) (28,419) (17,760)
Other income, net 213 290 564 656
Equity in earnings (loss) of
unconsolidated affiliates (106) - 8 -
Minority interest (177) (127) (558) (492)
Earnings before income taxes 18,924 16,842 57,303 49,569
Income taxes 7,964 7,025 23,883 20,963
Net earnings $ 10,960 $ 9,817 $ 33,420 $ 28,606
Earnings Per share $ .16 $ .15 $ .49 $ .43
Weighted average shares 70,200 66,200 68,200 65,800
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